Gerry Smith
ODPAbout Gerry Smith
Gerry P. Smith (age 61) has served as Chief Executive Officer and a director of The ODP Corporation since February 27, 2017, leading the transformation from a tactical, product-based business to a services-driven B2B organization . Prior to ODP, he held senior operating, supply chain, and P&L roles at Lenovo (2006–2016) and Dell (1994–2006), with deep expertise in operations, supply chain, and turnarounds . Under his tenure, ODP executed $300M of share repurchases in 2024 and maintained $644M of liquidity ($166M cash) as of year-end 2024, while advancing strategic initiatives and divesting Varis to sharpen focus on core operations .
Five-year pay-versus-performance shows variability: ODP’s cumulative TSR index fell to 88 in 2024 (peers 204) after outperforming in 2023 (216 vs 174), with GAAP net income of $(3)M and Adjusted EBITDA of $268M in 2024 . The Compensation & Talent Committee (C&T) links incentives primarily to Adjusted EBITDA, Net Sales, and relative TSR (with an EPS-CAGR metric in 2024 LTI), and removed ESG from the 2025 STI to focus on Adjusted EBITDA and Adjusted Free Cash Flow; 2025 PSUs will be solely relative TSR to sharpen shareholder alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lenovo Group | EVP & COO (2016); EVP & President, Data Center Group (2016); COO Personal Computing & Enterprise (2015–2016); President Americas (2013–2015); President North America & SVP Global Operations (2012–2013); SVP Global Supply Chain (2006–2012) | 2006–2016 | Led global operations and high-growth enterprise business; end-to-end supply chain leadership . |
| Dell Inc. | Multiple executive roles | 1994–2006 | Scaled operations as Dell became a global PC leader . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Arrow Electronics, Inc. | Independent Director; Chair, Compensation Committee | 2020–present | Public company directorship and comp committee leadership . |
| Zero100 (advisory) | Founding Advisory Board member | Since Jan 2022 | Focused on zero-carbon, digital supply chains . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1,100,000 | $1,100,000 | $1,100,000 |
| All Other Compensation ($) | $34,150 | $75,379 | $32,889 |
| All Other Compensation Detail (2024) | – | – | Car allowance $25,000; 401(k) match $7,692; other $196 |
Notes:
- Mr. Smith’s base salary has not increased since his hire date on Feb 27, 2017; 90% of his compensation remains at-risk, with any changes occurring in STI/LTI opportunities tied to measurable performance goals .
Performance Compensation
Summary Compensation (CEO)
| Year | Stock Awards ($) | Non-Equity Incentive Plan Comp ($) | Total ($) |
|---|---|---|---|
| 2022 | $7,500,000 | $1,889,593 | $10,523,743 |
| 2023 | $8,000,000 | $1,659,900 | $10,835,279 |
| 2024 | $8,000,000 | $330,000 | $9,462,889 |
2024 Annual Bonus (STI) – Design and Outcomes (CEO)
- Target bonus: 150% of base salary; maximum 200% of target .
- Metrics and weights (CEO group): Adjusted EBITDA 40%, Net Sales 40%, Non-Financial ESG 20% .
| Metric | Weight | Threshold (50%) | Target (100%) | Max (175%) | 2024 Performance | Earned % (Weighted) |
|---|---|---|---|---|---|---|
| Total Company Adjusted EBITDA | 40% | $400.0M | $411.0M | $472.7M | $267.6M | 0% |
| Total Company Net Sales | 40% | $7.32B | $7.71B | $8.09B | $6.99B | 0% |
| Non-Financial ESG (3 measures) | 20% | See grid | See grid | See grid | 116.67% (capped at 100% absent EBITDA target) | 20% total payout |
- Resulting payout (CEO): 20% of target = $330,000, consistent with Summary Compensation Table .
For 2025, STI will be simplified to Adjusted EBITDA and Adjusted Free Cash Flow (with BU financials as applicable); ESG metrics removed. LTI PSUs will be based exclusively on relative TSR over 3 years .
2024 Long-Term Incentive (LTI) – Structure and Grants
- Mix: 60% Performance Share Units (PSUs) and 40% time-vested RSUs .
- PSU metrics: 50% 3-year relative TSR vs peer group; 50% 3-year Adjusted EPS-CAGR; payouts 0–200%, capped at 100% if absolute TSR is negative .
PSU performance curves (selected):
- TSR vs peers: 25th percentile (50%) / 50th (100%) / 85th (200%); capped at 100% if absolute TSR negative .
- EPS-CAGR: 12.8% (50%) / 17.1% (100%) / 21.4% (200%) .
CEO 2024 LTI grants (3/25/2024):
| Component | Threshold | Target | Max | Grant-Date Fair Value ($) |
|---|---|---|---|---|
| PSUs – TSR | 23,297 | 46,593 | 93,186 | $2,400,000 |
| PSUs – EPS-CAGR | 18,683 | 37,366 | 74,732 | $2,400,000 |
| RSUs (time-vested) | – | 62,124 | – | $3,200,000 |
Vesting schedules:
- 2024 RSUs: vest one-third on 3/25/2025, 3/25/2026, 3/25/2027; 2024 PSUs cliff vest 3/25/2027 (subject to performance and service) .
- 2023 RSUs: 3/10/2024, 3/10/2025, 3/10/2026; 2023 PSUs cliff on 3/10/2026 .
- 2022 RSUs: 3/10/2023, 3/10/2024, 3/10/2025; 2022 PSUs cliff on 3/10/2025 .
Equity Ownership & Alignment
- Beneficial ownership (3/3/2025): 969,596 shares (3.3% of outstanding); options exercisable within 60 days: 136,549 . Total shares outstanding: 29,818,271 .
| Item | Amount |
|---|---|
| Beneficially owned shares | 969,596 (3.3%) |
| Options exercisable within 60 days | 136,549 |
| Anti-pledging/hedging | Prohibited for directors and executive officers |
| Executive stock ownership guideline | CEO: 6x base salary; must retain 50% of net shares until compliant |
Outstanding equity at FY2024 year-end (CEO):
| Grant Year | Unvested RSUs (#) | Market Value ($) | Unearned PSUs (#) | Market/Payout Value ($) |
|---|---|---|---|---|
| 2024 | 62,124 | $1,423,882 | 100,424 | $2,301,718 |
| 2023 | 44,752 | $1,025,716 | 93,746 | $2,148,658 |
| 2022 | 23,327 | $534,655 | 83,959 | $1,924,340 |
- Stock options: 136,549 NQSOs at $44.50, expiring 2/27/2027; fully vested (hire grant) .
- 2024 vesting activity: 161,130 shares vested; value realized $8,245,871; no option exercises .
Employment Terms
- Employment agreement effective Feb 27, 2017; amended July 1, 2020 post-reorganization .
- Core terms: base salary $1,100,000; target bonus 150% of salary (max 200% of target); annual LTI; benefits/perquisites .
Severance and CIC economics:
- Non-CIC severance: 2x base salary plus 18x COBRA premium differential; equity treated per plan (partial pro-rata RSU vesting; options remains exercisable per plan) .
- CIC Plan (double-trigger within 24 months): cash equal to 2x (base salary + average prior 3 years annual incentive), plus 18x COBRA premium differential; equity acceleration: RSUs vest; TSR PSUs vest at earned rate as of CIC; EPS-CAGR PSUs vest at target (subject to assumptions/award terms); outplacement up to 24 months; 280G cutback applies (no gross-up) .
Illustrative CEO payout (termination upon/after CIC on 12/28/2024):
| Component | Amount |
|---|---|
| Total under CIC Plan (incl. equity acceleration) | $12,281,692 |
| Equity acceleration component | $5,781,527 |
Clawbacks and policies:
- SEC/Nasdaq-compliant clawback for erroneously awarded incentive compensation; broader recoupment policy for restatements since 2010; hedging and pledging prohibited .
Board Governance
- Smith is a non-independent director, serving as CEO and director since 2017; he serves on no board committees .
- ODP maintains separation of Chair and CEO; independent non-executive Chair (Wendy Schoppert) since June 2024; board committees are 100% independent .
- Dual-role implications: The independent Chair structure and fully independent Audit, Compensation & Talent, and Corporate Governance & Nominating Committees mitigate CEO/Director dual-role concerns and support independent oversight .
Committee oversight and advisor:
- C&T Committee (independent) oversees executive pay, peer benchmarking, succession, and clawbacks; independent consultant Meridian confirmed independent with no conflicts .
Director and shareholder feedback:
- Say-on-pay support: 98.5% approval on 2023 compensation decisions; 2024 outreach included top holders; design changes added BU metrics based on feedback .
Performance & Track Record
Pay vs performance and operating metrics (company-level):
| Year | ODP TSR (Value of $100) | Peer Group TSR | GAAP Net Income ($M) | Adjusted EBITDA ($M) |
|---|---|---|---|---|
| 2020 | 110 | 122 | (319.0) | 514.00 |
| 2021 | 150 | 173 | (208.0) | 476.00 |
| 2022 | 175 | 152 | 166.0 | 436.00 |
| 2023 | 216 | 174 | 139.0 | 414.00 |
| 2024 | 88 | 204 | (3.0) | 267.60 |
Selected 2024 operational highlights:
- $300M share repurchases; $644M available liquidity ($166M cash, $478M revolver capacity) .
- Strategic focus on B2B; sale of Varis; continued retail optimization .
Leadership transitions:
- Former CFO D. Anthony Scaglione resigned effective Sept 13, 2024; outstanding equity cancelled .
Compensation Committee Analysis (Design Features and Peer Benchmarks)
- 2024 peer group of 20 companies across B2B distributors and retailers used for pay benchmarking; selection based on revenue/market cap ranges and business model similarity .
- LTI includes rTSR with absolute TSR cap; multi-year vesting; robust ownership guidelines; clawbacks; and no tax gross-ups (280G cutback) — collectively mitigating risk-taking and aligning with shareholder value .
Director Compensation (Context for Dual Role)
- Non-management directors receive $250,000 annual retainer ($92,500 cash, $157,500 equity), with additional committee chair/member fees; equity typically granted as RSUs deferred until separation. Committee fees: Audit Chair $25k ($12.5k member); C&T Chair $20k ($10k member); CG&N Chair $15k ($7.5k member) .
- These structures underscore independent oversight while the CEO serves as a management director .
Additional Detail Tables
Stock Grants Outstanding and Vesting Dates (CEO)
| Award Cohort | RSU Vesting | PSU Vesting |
|---|---|---|
| 2022 grants | RSUs: 3/10/2023, 3/10/2024, 3/10/2025 | PSUs: cliff 3/10/2025 (rTSR) |
| 2023 grants | RSUs: 3/10/2024, 3/10/2025, 3/10/2026 | PSUs: cliff 3/10/2026 (rTSR/EPS) |
| 2024 grants | RSUs: 3/25/2025, 3/25/2026, 3/25/2027 | PSUs: cliff 3/25/2027 (rTSR/EPS) |
2024 Equity Exercise/Vesting Activity (CEO)
| Activity | Shares | Value |
|---|---|---|
| Options exercised | – | – |
| Shares acquired on vesting | 161,130 | $8,245,871 |
Investment Implications
- Pay-for-performance: 2024 STI paid at 20% of target due to underperformance vs financial targets, evidencing negative discretion embedded in the plan; LTI emphasizes rTSR and EPS-CAGR with strict caps (100% cap if absolute TSR negative), and 2025 shifts to rTSR-only PSUs further heighten shareholder alignment .
- Retention and selling pressure: Significant unvested RSUs/PSUs across 2025–2027 create strong retention hooks; large annual vesting events (161k shares vested in 2024) may drive periodic liquidity needs but hedging/pledging is prohibited, and guidelines require share retention until meeting 6x salary threshold .
- Alignment and skin-in-the-game: Smith’s 3.3% beneficial stake and strict ownership policies support alignment; no tax gross-ups and robust clawbacks reduce governance risk .
- Change-in-control economics: Double-trigger CIC with 2x cash multiple plus equity acceleration (TSR at earned rate; EPS at target), with 280G cutback; estimated total payout of ~$12.3M at 12/28/2024 underscores balanced protection without gross-ups .
- Governance mitigants to dual role: Independent Chair and fully independent committees buffer CEO/director dual-role risks; high say-on-pay support (98.5% for 2023) and ongoing investor engagement indicate endorsement of pay design .